Interest-Only Calculator FAQ

It estimates payments on an interest-only mortgage during the interest-only period and the higher fully-amortizing payment that begins once principal repayment kicks in.

The Complete Guide

An interest-only mortgage lets you pay just the interest for an initial period, keeping payments low. It is a cash-flow tool, useful for borrowers with uneven income or those who expect a lump sum, but it builds no equity during the interest-only years.

The defining feature is the payment jump. When the interest-only window closes, the full balance amortizes over the years that remain, so the payment can rise substantially. Planning for that step-up is the whole game.

These loans reward a clear exit: a sale, a refinance, or a planned principal paydown before the jump. Without one, the rising payment can become a strain. Use the calculator to see exactly how much the payment increases and when.

How the Calculator Works

During the interest-only period the calculator charges only the monthly interest, with no principal reduction. After that period it amortizes the full balance over the remaining term, producing a noticeably higher payment.